Lottery is a procedure for distributing something (usually money or prizes) among a group of people by lot or chance. The type of lottery considered here is a form of gambling in which a usually large number of people purchase chances called lottery tickets, in which the winning tickets are drawn from a pool composed of all tickets sold or offered for sale. The value of the prizes is the amount remaining after expenses, which include the profits for the promoter, the costs of promotion, the portion allocated to designated state purposes, and the taxes and other charges. In most large-scale lotteries, a very large prize is offered along with many smaller ones. Lotteries have a very wide appeal as a means for raising money; they are simple to organize, easy to plan, and, in general, popular but controversial.
The practice of determining the distribution of property by lot is traceable to ancient times. Among dozens of Biblical examples, the Old Testament (Numbers 26:55–56) has the Lord instructing Moses to take a census of the people of Israel and to divide the land among them by lot. The Roman emperors Nero and Augustus used lotteries to give away property and slaves during Saturnalian feasts and other entertainments. Modern lotteries of a similar type include those used for military conscription, commercial promotions in which property is given away by a random procedure, and the selection of jury members from lists of registered voters. Under the strict definition of a gambling type of lottery, however, payment of a consideration (property, work, or money) must be made for a chance of receiving the prize.
The basic elements of modern lotteries are usually quite simple. First, there must be some means of recording the identities of the bettors, the amounts staked by each, and the number or other symbol on which the money is bet. The bettor may write his name on a ticket that is deposited with the lottery organization for subsequent shuffling and possible selection in the drawing. Or the bettor may buy a numbered receipt, in the knowledge that this number will be entered into a pool of numbers, the bettor having the responsibility of determining later if his ticket was among the winners. Another procedure requires only that the bettor inform a representative of the lottery which number he guesses will be drawn, and the representative is trusted to appear later with the prize, if any is won. This is the usual procedure in the illegal numbers game, which has been popular for several decades in many cities throughout the United States.
A second element of all lotteries is the drawing, which is a procedure for determining winning numbers. This may take the form of a pool or collection of tickets or their counterfoils from which the winners are extracted. The tickets must first be thoroughly mixed by some mechanical means, such as shaking or tossing; this is a randomizing procedure designed to insure that chance and only chance determines the selection of winners. Computers have increasingly come into use for this purpose because of their capacity for storing information about large numbers of tickets and also for generating random numbers for identifying the winners. Promoters of public, especially of large-scale, lotteries may exploit the opportunity to make the drawing and/or mixing process as colorful and dramatic as possible.
The third element common to all lotteries is the existence of a mechanism for collecting and pooling all the money placed as stakes. This is usually accomplished by a hierarchy of sales agents who pass money paid for the tickets up through the organization until it is “banked.” A practice common in many national lotteries is to divide tickets into fractions, usually tenths. Each fraction if and when it is sold separately costs slightly more than its share of the total cost of an entire ticket. Many people then buy whole tickets, in effect at a premium or discounted price, for marketing in the streets where customers can place relatively small stakes on the fractions. In a large-scale lottery, the use of the regular mail system is desirable for communicating information and transporting tickets and stakes. In the United States and some other countries, however, postal rules prohibit use of the mails. Postal prohibitions apply also to international mailings of lotteries. Though post-office authorities are diligent, it is clear that much smuggling and other violation of interstate and international regulations occurs.
A fourth requirement is a set of rules determining the frequencies and sizes of the prizes. Costs of organizing and promoting the lotteries must be deducted from the pool, and a percentage normally goes as revenues and profits to the state or sponsor. Of the remainder available for the winners, a decision must be made on whether to pay few large prizes or many smaller ones. Potential bettors seem to be attracted to lotteries that offer very large prizes, but in some cultures they also demand a chance to win smaller ones. Authorities on lotteries disagree about which of these choices is better for the welfare of the people and the economic success of the lottery. The amount of the pool returned to the bettors tends to be between 50 percent and 60 percent.
A modern form of lottery ticket sales is the on-line sale, in which tickets are printed by a terminal/printer in a merchant's store. In an online sale where the player chooses numbers, the terminal/printer is connected to a secure central computer system operated by the state lottery commission, and it is that central computer system that recognizes and accepts the players' choices of numbers and sends signals to the remote terminal/printer to print the ticket with selected numbers and records the transaction in a secure central database or databank. In a “quick-pick” type of transaction, which is ubiquitous in modern numbers lotteries, the central computer provides the numbers and sends a signal to the remote terminal/printer to print the ticket with those numbers and then records that transaction in the secure central databank.
In multi-state games such as Powerball®, the procedure is basically the same, with each participating state being responsible for verification and winner files, and then reporting to the central coordinating group. In on-line lottery games, a matrix is established that governs the winning combinations and the prize structure. All on-line tickets bear special secure coding to help minimize fraud. Over the past few years, on-line lottery tickets have become less popular than instant lottery tickets, due mostly to the fact that instant tickets are much more likely to be purchased on impulse than on-line tickets.
In instant lottery sales, participating merchants receive a number of pre-printed tickets, which are furnished with secure coding minimizing fraud. Like on-line sales, the prizes printed on such tickets are also determined by a matrix that governs winning combinations and the prize structure, based on the prize pay-outs desired, the number of retailers participating and the populations they serve. In order to see the numbers or prizes printed on the tickets and determine if they hold a winning ticket, players scratch off the coating that obscures the printing. Although winning combinations have been printed on some of those instant tickets, no one knows where they are in the package, or even which store received packages containing big winner tickets.
There are also other variations of instant games including punch-board, pull-tab and break-opens. Unlike on-line tickets and scratch-off instant tickets, these variations come in pre-set, pre-determined packages where the matrix has already been built in according to some pre-determined formula suitable for smaller establishments. Unlike scratch-off games, these games have an advantage in that it is a simple matter to add an additional retailer because the addition of that retailer will not affect the matrix because it has been pre-determined, based on the number of tickets comprising the package.
In both online and instant ticket lotteries, prizes that remain unclaimed after some statutorily prescribed period that varies from state to state, ranging up to one year, become void as winning tickets. After the winning tickets become void, any prize money can revert to the state, or be added to future prize pools.
Among the family of modern lottery games are the “passive” or “passive draw” game, the “instant” game, the “pick” game, and the “lotto” game. The “passive draw” game includes a purchase of a pre-numbered ticket. Passive draw tickets are generally sold in ascending numerical order and after a certain period of time a winning number is selected and a prize is awarded to the holder of the ticket bearing the winning number. Another version of a passive game is to add various ways to win. Take an example in which the number selected in a passive drawing is 978571. Holders of tickets matching the first two digits of 97 win prizes, tickets matching the first three digits 978 win prizes, and so forth.
In an “instant” game, a player purchases a preprinted ticket with revealable numbers, symbols, or other game characters. Instant games are usually based on a theme such as card games, lucky numbers, familiar characters, etc. Tickets containing three like symbols win a prize, in which the prize level is preset. If a player's card is a winning card, then the player can immediately (instantly) cash the ticket and receive a prize. There is no traditional drawing to determine a winner in an instant game, and there are literally hundreds of variations of instant games.
In an example of a “pick” game, a player selects a 3 digit number from 000–999. A random number from 000–999 is drawn. If the drawn number matches the number selected by a player, then the player wins a prize. This type of pick game is a “straight bet” game. Another example of a pick game involves a player who selects to play just the first two digits or the last two digits of, for instance, a three digit number. In this case, the prize that may be won is lower but the player only has to match the two digits, in exact order, instead of all three digits. These are called “front and back pair” bets. Yet another variation is called a “box” bet, in which a player selects, for instance, a three digit number but is playing every order of the three digits. For instance, if a player plays the number 123 boxed, then the player really has purchased 6 bets, one each on 123 132, 231, 213, 312, and 321. If any one of these numbers is drawn, the player wins.
A “lotto” game is often referred to as a matrix game, in which a player selects X numbers from a pool of Z numbers. The lottery draws Y numbers from the pool of Z numbers. Players win a prize if enough of their selections match the selections drawn by the lottery. As an example, if the lotto game were a 6-6-36, then the player would select 6 numbers from a pool of 36 and the lottery would draw 6 numbers from the pool of 36 numbers. Players would win if their selections match 3, 4, 5, or 6 of the lottery selections. In this type of game, numbers cannot be duplicated. In other words, every number in a lotto style game is unique, and the order is not relevant in a lotto game.
Although the art is replete with various systems and methods for conducting and playing lotteries, needed is yet another that is simple to conduct, uncomplicated, and that provides players with many ways to win.